I've owned (2) rental townhomes for 8 years - I've used a property manager and I've never once had any problems. However - - now, this won't just be a 'side' investment, I am out of my lifelong business career - - and real estate investments will be a key part of what hopefully is my investment path from now on. About me: I have NO knowledge in home maintenance. None, zero. Eventually I am hoping to buy 4-5 units - could be townhomes, could be Single Family. Metro areas. Lately I've been wondering - could I do it without a property manager and I'm SURE there's things I'm not thinking of. My thought process: *Advertising the rental. Learning how to take good pictures, and advertising on the proper sites. *Tenant screening: Credit report. Landlord reference. (Preferably even a non current landlord. Skeptic in me worries if a current landlord would give a good reference to a bad tenant, just to get them off his books?) (In my previous business - for 20 years I had a staff of 40. Hired people from all walks of life. Was involved with direct retail selling, every day and had to evaluate credit reports daily and at times, make judgement calls about selling to people - - and then getting them approved after the fact....rarely made a bad call. ) *Rent Collection: Just make online payment a requirement? I'd rather not knock on doors for rent. *Maintenance: Is it customary to put a deductible in - say $100 per incident? Point is not to get calls for a light bulb going out. (For normal stuff - I've ALWAYS told my property manager to get it fixed, get it fast and right. Keep the people happy. I don't think twice about replacing a washing machine for instance. ). Point being - my property manager merely calls a plumber, electrician, whatever - he doesn't repair it himself -- - so why can I just cultivate relationships with handymen? *Turnover: I guess that involves collecting keys, changing locks, walk thru inspections - and then doing clean ups, carpets, paints as needed? FEARS ******** I plan to stick to somewhat nice areas, not too downscale. I'm fine with slightly less ROI if it means a better credit tenant who I sense won't be a problem or abuse the property. Point being - if I start out with a decent tenant, I"m responsive to maintenance problems and don't cut corners - I'm HOPING to avoid angry tenants - - hopefully that is realistic. *EVICTIONS: I can't imagine having to go kick someone out of their house. *TOUGH CUSTOMERS: From McDonald's to the Four Seasons - all businesses have them - people who just are never ever happy. After selling my businesses, I'm sort of sick of that after 20 years :) . Am I realistic thinking that most tenants, are fair minded as long as I do all I can to uphold my end? *SAFETY: These days, people are nutty. Am I too paranoid thinking that if there's a problem collecting rent, and I have to tell people to leave....they'd come after me personally? Think of all the workplace violence - why would this be different? I keep doing the math..... if I own 5 units@20,000 gross rent. By the time my first kid starts college, I'd save $50,000 in property manager fees. For a 46 year old who is sort of retired - - $50k is a nice bonus. Any thoughts, positive or negative I'd really appreciate. Thanks.

It is easier to self manage a B class rental than a D class. However, in the D class areas, where you really need the help, it can be almost impossible to find a good quality property manager. So you have to do some of the work yourself at times with a D class rental as in "manage your manager" even though you are paying a property manager. If you do not supervise your out of state property manager through emails, phone, drive by inspections by others etc sometimes they'll neglect maintenance and jeopardize the safety of the tenants.

Anyone do their own property management?

Brandon RushPro Member

Real Estate Agent · Portland, CT · Member since 2019 · 761 posts · 849 votes

5y

Hey Mel,

Great question. For me personally, it would come down to two big questions:

* Do/Would I truly enjoy property management?
You have to be honest with yourself here, do you "REALLY" want to take on these tasks and be able to enjoy the work? If not, I would say do not waste your time. By taking on work you did not have to do from the start start, it could easily turn this into a job for you that you may not enjoy. Which will eventually slow down your real estate growth. As you mentioned, there are many facets of property management, do you want to take all of that on yourself?

* What are your future goals?
How would property management align with your future goals? Would it help you build more capital by saving the 8-10% management fee every month or would it teach you something that will help you reach your goals? Example, if your goal is to acquire 20 properties in the next 5 years, how will or will not managing your own properties help you achieve that goal? Think of your end goal and work your way backwards.

I hope this helps out in your decision.

Good luck on your journey!

Podcast Guest on Show #221

14 Reply

Austin F.

Investor · MI · Member since 2015 · 227 posts · 478 votes

5y

It sounds like you have a clear idea what will be required of you, and that is half the battle.

Treat this like a job, spend a lot of time here on the forums reading about things like tenant screening, draw up your own minimum requirements and stick to them.

Youtube stuff like how to fix a leaky toilet, how to reset a circuit breaker, easy common issues are what will suck money out of you.

Be ready for calls at odd times wanting odd things. I've found that as I've greatly expanded my knowledge of basic household maintenance, and knowledge of my properties I've been able to avoid many maintenance calls by coaching a tenant through how to do small things like unclogging a garbage disposal. They often don't live the idea at first, but everyone has at least attempted after I say "We can try to fix this over the phone, or I can come out and take a look at it bit that will cost xxx"

As your knowledge and systems get better the amount of time you spend should become less. I have double the units that I used to, and currently spend half as much time managing them.

To answer some of your specific questions:

Listings: go on Zillow and see how like properties are advertised, copy them. I have a Google drive link with an annoying amount of pictures and some walk through video that I send everyone who asks for more pictures. My goal is to do as few walk throughs as possible.

Rent collection: I use Venmo and Venmo only. Collecting rent on a personal account is against their terms of service, make your own judgement call here.

Turnover: I always ask myself "Would I move into this unit and be happy?" Cleaning carpets and scrubbing things is par for the course. You can hire this out if needed.

Fears: Screen well and avoid most of these issues.

9 Reply

Drew SygitBusiness Member

Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes

5y

If you DIY manage, how will you go on vacation?

[email protected]248-209-6824

Logical Property Management4.9459 Reviews

Website View Page

6 Reply

Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
5y
Originally posted by @Drew Sygit:
If you DIY manage, how will you go on vacation?

I have DIY managed for 15 years and have gone on 3-4 vacations a year during that entire time. Yes, I have taken a few calls while on vacation. I have had to coordinate a couple repairs and even did a tenant screening while on vacation. It is hardly a big deal if you accept that as part of the job. My business is mobile intentionally, so I can someday travel the world and run my business remotely.
3 Reply

Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

5y

Lots of people manage their own rental properties. For maintenance things, most tenants are going to change their own light bulbs. If stuff breaks as part of wear and tear, have them call you and you deal with it. That may mean hiring a handy man or doing it yourself. If they break something (ie punch a hole in a door), then get it fixed and charge them for it.

Know your local laws when it comes to tenancy. Use a standard lease form.

2 Reply

Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

5y

Originally posted by @Drew Sygit:

If you DIY manage, how will you go on vacation?

Lots of people who manage their own properties go on vacation. If the tenant has something come up, you can always call someone to deal with it.

14 Reply

Pat GoodyearPro Member

Syracuse, NY · Member since 2015 · 79 posts · 48 votes

5y

Some other thoughts...establish a google number, that way you can turn it off and screen calls if needed. Tell/train your tenants to call during specific business hours for non-emergency issues; otherwise they will call you day and night and weekends for anything. Establish what their responsibility is: ie. smoke detector batteries, light bulbs, flipping breakers, etc. Explain where the GFI outlets are and how to reset them. Put in your lease regarding pest removal and extermination. (ie their responsibility after 30 days) otherwise you will get calls for bats, skunks, ants, etc. Plan to do every 3 month inspections, and let them know you will do this. Look for leaks, drips, check your water heaters, change filters on the HVAC, etc.

6 Reply

Peter Jakel

Property Manager · Littleton, CO · Member since 2021 · 21 posts · 14 votes

5y

Why take on these tasks when you can hire a property manager with the systems and expertise already in place for a very small fee?

5 Reply

Karla Simmons

Vacaville, CA · Member since 2019 · 218 posts · 140 votes

5y

@Mel Park

After being less than thrilled with the service we received from a few property management companies, my husband and I decided we could do a better job ourselves and we have been for 20+ years. You will learn the ins and outs by talking to other landlords and just the experience. Our properties are all class B+ and I think that definitely helps with the kinds of tenants you will have. We have never had to evict anyone or even come close to it. If you do not have any maintenance experience, I would highly recommend that you find a good handyman to call on. I believe you will find that most tenants won’t bother you with the little things. At least that has been our experience. Good luck! I can’t imagine giving 10-12% to a property manager anymore.

12 Reply

Peter TverdovBusiness Member

Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes

5y

You can do it yourself but it likely won't be as well as a professional PM company.

You're also valuing your time at $0 (which so many people do, it blows my mind). So you will not be saving $50,000 over x years. Every single time a tenant contacts you, something breaks, a form needs filing, a bill needs paying a rental needs to be shown, that equals time. Time = money.

Up to you how you value yours...

[email protected]732-289-3823

4 Reply

Jim Cummings

Residential Real Estate Broker · College Station, TX · Member since 2013 · 1k+ posts · 969 votes

5y

@Mel Park. being your own PM is certainly something you can learn. A large measure of your success or failure will be your attitude and personality.

I have been a PM for other people for other people (still manage a few) and also habdle my own properties.

Message me if you want to discuss.

3 Reply

Sean McKee

Rental Property Investor · Chicago, IL · Member since 2017 · 268 posts · 189 votes

5y

@Mel Park you can 100% percent manage your own properties. It seems like you already know your criteria and what your tolerance is. I do a hybrid approach; I use a combination of virtual assistants , NestEgg(Online maintenance manager), brokers, lawyers, lockboxes to handle most of the property management. This has been cheaper than a regular property management and reduces how much time I spend involved. I still have to deal with some of the more complicated stuff, but overall it saves a lot of time than trying to everything myself. I will say this approach probably won't work if you live more than 1 hour away from your properties. You need to be around to bring stuff back in order from time to time.

However, I now will only take on deals that support the cost of a regular property manager. This will give me the option to turn it over in the future should I feel the need.

Bottom line is eventually you will need to turn some of the property management task in some capacity as you grow.

5 Reply

Al Lev

Rental Property Investor · Brooklyn, NY · Member since 2008 · 22 posts · 11 votes

5y

There are three key areas:

1. Can you train your tenants to self-manage the property? If something breaks can they call the professional to come and fix it. This will depend on the qualify of your tenants.

2. Can you build a network (usually 3 levels deep) of various professionals? Most of the landlords who self-managed have a trusted handyman available to take care of most of the stuff and manage other contractors.

3. What is your process to find, vet and select new tenants? Are you comfortable giving them self-guided tour or do you need someone to show them the unit? What is your process to resolve conflicts and possibly evict tenant?

IMHO, #3 is the key. Landlording is a people's business so all depends who are your customers.

Hope this helps.

Alex

1 Reply

Travis Steinemann

Specialist · Baton Rouge, LA · Member since 2018 · 118 posts · 110 votes

5y

@Mel Park a lot of the tasks can be automated or handled with inexpensive software. I personally use rentredi which is advertised on here a lot, which collects rent, can handle maintenance requests (although you still need a relationship with a handyman), do credit checks and advertises ( although I still put it on Zillow, apartments.com and Facebook manually). I also hire a real estate photographer but that is mainly because we do renovations and want great before and after pictures for our portfolio, but it makes our listings stand out too.

There are a lot of pm softwares out there, and if you have more than one or two units, I would probably consider one of them. Appfolio is another option and I've used that one too.

You don't need to reinvent the wheel, but it isn't that hard. Just make sure you document EVERYTHING and if rent is late, do exactly what the legal process is in your area with notice. Also do exactly what your lease says with late fees and treat everyone the same.

Best of luck, I self manage a few properties right now but will probably either hire in house pm if I get big enough or turn it over to a company if it starts taking too much of my time.

2 Reply

Tom O.

Chicago · Member since 2018 · 216 posts · 165 votes

5y

Couldn't agree more with the do it yourself. You will make mistakes along the way and learn but you will do a better job than just about anyone you can hire IMHO.

3 Reply

Jim K.

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

5y

@Mel Park

OK, a lot of people are giving you advice here and some of it makes more sense than the rest of it. Absolutely you can manage your own rental properties. I do. I am also a pretty good handyman who has worked hard to expand his skillset over the years and I handle almost all my own maintenance. You might call me a walking encyclopedia of home maintenance and renovation. That's one factor that you're going to have to overcome. Is it doable? Sure. It will take effort and money, however.

There's a natural learning curve to learning how to do this well. Nobody is perfect at it from Day 1. If you already own two rental properties and are looking to buy 4-5 more in short order, you may end up overwhelmed. Another possible risk factor.

When you say "nice areas," I don't know what you mean. Nice areas are nice areas due to a variety and combination of factors. There are some very nice neighborhoods where I live and operate that are filled with 100-year-old properties that require a lot of maintenance and specialized knowledge to keep in good repair. Still another possible risk factor if you're buying those kinds of properties, instead of stuff built well after WWII.

If it's something you'd like to explore, read a few books about managing rental properties and come back here to the forums to ask some more targeted questions. Good luck to you!

4 Reply

Curt Smith

Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes

5y

@Mel Park Brandon rush framed it very well.

I self manage 35 doors few calls per month. I'm on vacation now, no calls.

But im very good at PM and rehabbing a house ti bullet proof standards, and have a queue of contractors I just sms... :)

I strong suggest yiu and others read Landlirding on autopilot. Fantastic pm training.

For a buy and hold business model read my paper linked off my bp profile, hiw to buy a bullet proof portfolio.

Don't self pm if you aren't going to decide to do it well and get ti be good at it! Ie the 10k hours of effort principal. Taje training, join your local REIA and find local landlords to learn from David Tilney is a national trainer (google) I've taken as well, very goid.

5 Reply

Tracy Minick

Rental Property Investor · Monroe, WA · Member since 2018 · 177 posts · 98 votes

5y

@Mel Park I wholeheartedly agree with Brandon! Is it the best use of your time? Can you be efficient at it? Do you have time to set up processes and efficiencies? Can you afford to NOT be protected by a property manager who is aware of changing laws and requirements? Your best option would be to oversee a property manager with all the tools, skills and knowledge.

3 Reply

Jim StanleyPro Member

Denver, CO · Member since 2017 · 58 posts · 27 votes

5y

@Peter Jakel

It’s not a very small fee

And it’s often the difference between positive and negative cash flow

My first rental was negative cash flow after paying a manager

My next one was slightly positive with self management and had improved to good flow

It easy with newer houses, harder with older ones

5 Reply

Peter Jakel

Property Manager · Littleton, CO · Member since 2021 · 21 posts · 14 votes

5y

@Jim Stanley Definitely don't pay a property manager if you're going to go negative in cash flow. I wouldn't even take that business as a property manager. The owner/property manager relationship should be a partnership. The goal should be to work together in a win-win situation.

2 Reply

Mel Park

OP

Member since 2021 · 93 posts · 51 votes

5y

@Curt Smith

Appreciate the points you made. My reason for wanting to self manage is obvious - save the 10% times 4-5 homes. Knowing myself- I feel that with research, reading, meeting landlords, reading books - and yeah, making a mistake or two - I could be fine at online rent collections, screening tenants, enforcing lease provisions. Doing repairs and remodels? No way. I'd have to have relationships with handymen.....but that being said, my current PM (who is great)....doesn't do repairs - he just calls one of his contractors. So I'm wondering - - can I do that model.

2 Reply

Peter Jakel

Property Manager · Littleton, CO · Member since 2021 · 21 posts · 14 votes

5y

@Mel Park There's no doubt in my mind that owners can do property management with the right tools and resources. The question every owner has to ask is whether they want a job or to be an investor. Property management is a full-time job and, after a certain number of doors/units, another business that needs consistent oversight.

0 Reply

Mel Park

OP

Member since 2021 · 93 posts · 51 votes

5y

@Tracy Minick

Hello Tracy, I fully hear what you and Brandon say about time. What is my time worth? Well, I'm not sure if it's worth that much in that I've owned decent sized businesses since I was 24 and monetized 2 companies. The 3rd one - well, I got out alive :). I'm 46 - - no college degree and have never had a 'job' other than my teenager jobs. As an adult - it was solely my companies with 40 full time employees. Point being, it's not like I'm qualified as an engineer or doctor or lawyer or indian chief. Basically, over the long term - -with stocks, bonds, and real estate if I can make an annualized average return of 5%-6% - I can live just fine. Right now .....with transaction costs, PM costs, and home prices the way they are - - I feel if I pay cash for houses, my yearly return on rents is 3.5%. Appreciation of 3% per year puts me anywhere from 3.8%-5% - the longer I hold the better. So if I'm sitting at home, watching CNBC and BeaverCleaver and going to lunch and spend time with kids 24/7 - I don't think my time is worth that much. I am in no way udnerestimating the skill it takes to manage (my current 2 units have PM) I just feel...if DIY means I net another $50k in 5 years, or $100k in 10 years -- to someone who retired early that is a meaningful amount hence I'm exploring it. My gut tells me I'll buy a few units out of state - and use PM for it. I may buy a unit locally - and that will be the *one* unit I try to PM myself as I'd rather learn and make mistakes on 1 unit, versus 5 or 6. I realize it could be a nightmare if I do a bad job. But if I do ok - -it's a nice enhancement to ROI.

2 Reply

Jeff S.

Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes

5y

*EVICTIONS: I can't imagine having to go kick someone out of their house.

@Mel ParkI managed 6 to 9 units working full-time for 20 years then another 10 years while retired. It is a relationship business and the experience is only as good as the tenant is as a person. Some relationships are good and some are bad.

I suggest you try it. Some people are good at it and some aren't. Learn all the rules and laws. Don't rent to sob stories and don't rent to people as a favor for someone or as a referral. When you hand over the keys to your house you become very vulnerable to people who may not mean well.

I am starting to use property management because the type of tenant that I am finding now are not the same type of people that I was able to easily rent to for all those years. I live in a tenant friendly state and am not finding it rewarding anymore. The house I turned over to PM raised the rent from $1400 to $2400. I expect lots of turnover, wear and tear so we will see how it works out. I have some great long-term tenants that I keep the rent low and it is mailbox money, no fuss no muss just good low maintenance people.

2 Reply

Karl B.

Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes

5y

*Advertising the rental. It's simple. Facebook marketplace/local Facebook pages are how I rent most units out though CraigsList and Zillow Rental Manager works to a lesser degree.

*Tenant screening: Credit report. It's simple. I do it through my local apartment association. If you don't have this you can use an online service or a private local service (one of my R.E. attorneys gave me a few contacts to a few local businesses who can process them if I'd prefer)

*Rent Collection: I do both online and by check.

*Maintenance: Most tenants I've had don't do the trivial stuff. The key is getting them to report things that need fixed quickly - like leaks or other damage that could let in water.

Yes - having good handymen is all one needs - and it's good to have a few plumbers and handymen on speed dial and not just one. I only work with one electrician - those typically aren't rush jobs for me.

*Turnover: It's pretty simple. I actually remove locks and bring them to the locksmith for them to be rekeyed - it's WAY cheaper than having the locksmith come to me. And some landlords rekey themselves using smartlocks or use digital locks.

FEARS

********

Yes - it's realistic. Though pain in the @ss tenants know no property class or income.

*EVICTIONS: It's not so bad. I try and do the evictions myself - it's easy and the prep work - for me - is fun. I spend maybe three hours on the case and it saves me hundreds.

*TOUGH CUSTOMERS: Most tenants are cool to varying degrees.

*SAFETY: Learn self-defense if you're concerned. Most tenants won't attack nor stalk you and if you think one is a weirdo and you don't feel comfortable going to the property then bring a big, strapped scary relative/friend with you.

2 Reply

Terrell Garren

Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes

5y

Well, I could certainly pay someone $2,500 a month for maybe 5 hours time and run the risk of them placing a tenant in my property that changes their Harley oil in my living room. Or I could just do the PM myself.

Regarding the value of my time, I can cut back on my fishing, biking, napping for 5 hours a month without much impact.

5 Reply

Anyone do their own property management?

Anyone do their own property management?

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